We know our members have many choices when it comes to funding. What sets the line of credit apart? I talked to three frequent users of the line of credit to discover what they value about this funding source.
Who I Talked With
Why they are Line of credit fans
One of the most prevalent reasons these members use the line of credit is the speed and ease of drawing on their line. “It only takes a one-minute phone call each day to access the funds,” said Bryan VonFeldt. VonFeldt calls the FHLBank Lending Desk so much that he even has the number memorized.
Speed isn’t the only consideration. A superior rate, especially when considering the above-market FHLBank dividend, is also a strong reason to use the line of credit. Randy Pieper notes that the line of credit is a significantly better rate than their two other sources of overnight funding. “We factor the dividend into our rate comparison, even though FHLBank beats other funders’ rates without the dividend,” said Pieper. Bryan VonFeldt agrees, “We know FHLBank is our cheapest funding source. Of course, the dividend makes it even better.”
Flexibility is also a key benefit of the line of credit. No matter whether you are acting on loan opportunities, like Susie Lutz, or a swing in daily deposit balances, like Bryan VonFeldt, the line of credit is flexible enough to fit your needs. Those interviewed said it was a bonus that the line of credit doesn’t lock them in and allows them to pay down the next day, if needed. "I appreciate the fact I can pay our line of credit balance down anytime and the late deadline [4 p.m. CT],” Lutz said. “It’s also great that we don’t have to do any paperwork when we draw on our line.” Bryan VonFeldt noted that the line of credit balance doesn’t have to be paid to zero every day like some funding providers.
Speaking of other providers, one of the members interviewed said they had signed up to use QwickRate, the deposit listing service. They found it was too cumbersome with the numerous steps involved in placing an order and came back to the line of credit.
Whether they are using securities or loans to collateralize their line of credit, interviewed members were pleased with both options. “The fact that we can pledge loans keeps us from having to come up with extra securities for collateral, and that is a big deal,” said VonFeldt. Randy Pieper appreciates FHLBank’s third-party collateral agreement for securities. “Unlike other lenders, FHLBank typically doesn’t require collateral to be moved to them. Securities only have to be pledged,” Pieper explained.
The bottom line with any funding source is how it helps members more easily do business in their communities. “Access to our FHLBank line of credit keeps our customers happy by allowing us to quickly act on loan opportunities as well as loan participations,” said Lutz.
To learn more about putting your FHLBank line of credit to work for you, contact our Lending Desk at
FHLB.Lending@fhlbtopeka.com or 800.809.2733.
We can test your line for less than $1 and only a few minutes of your time. Our team will be happy to walk you through accessing your line of credit for a real or test borrowing need. To make it even easier to draw on your line of credit, we plan to debut online draws. Watch for more information later this year.